NREL Examines Solar Policy Pathways for States

February 26, 2014

The Energy Department's National Renewable Energy Laboratory (NREL) has published a report that aligns solar policy and market success with state demographics. By organizing the 48 contiguous states into four peer groups based on shared non-policy characteristics, the NREL research team was able to contextualize the impact of various solar policies on photovoltaic (PV) installations.

"Although it is widely accepted that solar policies drive market development, there has not been a clear understanding of which policies work in which context," lead author Darlene Steward said. "This study provides much-needed insight into the policy scope and quality that is needed to spur solar PV markets across the United States."

Mixed. In New Mexico, the leading state for installed capacity in its peer group, policy diversity and strategic implementation have proven to be critical in effectively supporting the market.

The analysis shows that the effectiveness of solar policy is influenced by demographic factors such as median household income, solar resource availability, electricity prices, and community interest in renewable energy. The data also show that it’s the number and the make-up of the policies that spur solar PV markets. Follow-on research expected for release this summer identifies the most effective policy development strategies for each state context and provides strategies for states to take action.

As part of a larger effort to determine the most successful policy strategies for state governments, this report builds on previous research investigating the effect of the order in which policies are implemented. The policy stacking theory, which is outlined in the "Strategic Sequencing for State Distributed PV Policies" report, aims to draw private investors to develop PV markets.

This body of work is supported by the Energy Department's SunShot Initiative, which is a national effort to make solar energy cost-competitive with traditional energy sources by the end of the decade. Through SunShot, the Energy Department supports private companies, universities, and national laboratories working to drive down the cost of solar electricity to $0.06 per kilowatt-hour. Learn more at http://www.energy.gov/sunshot.

NREL is the U.S. Department of Energy's primary national laboratory for renewable energy and energy efficiency research and development. NREL is operated for the Energy Department by The Alliance for Sustainable Energy, LLC.